New generation of QBs emerge but league faces threats

MIAMI (Reuters) - A new generation of talented quarterbacks emerged in 2012 but a refereeing fiasco, worries over concussions and player behavior all left their mark on the National Football League (NFL).
The year was also a tantalizing tale of the Mannings with New York Giants quarterback Eli Manning winning his second Super Bowl title in four years with a win over New England in the same stadium where older brother Peyton played for Indianapolis.
After a year out with serious neck problems, Peyton Manning restarted his career with the Denver Broncos after 14 years with the Colts and quickly cast aside any doubts over his durability by leading his team to a playoff berth and division title.
Manning's revival came at the expense of Tim Tebow, the most talked about player in 2011, who has spent most of this year on the sidelines after being traded to the New York Jets.
'Tebow-mania' reached its peak in January when he led the Broncos to a playoff win over Pittsburgh but a crushing loss to the New England Patriots a week later was the last in a Denver uniform for the unorthodox quarterback.
Tebow's charisma, his noted religiosity and clean-cut good looks made him one of the most popular NFL players in years but that did not stop Jets head coach Rex Ryan leaving him as a bit-player and back-up to Mark Sanchez with most critics agreeing that Tebow's poor passing technique has hampered his career.
Tebow's fans understandably view 2012 as a year in which an exciting player's talent was wasted but in the big picture there has been no shortage of exciting new talent to enjoy in the NFL.
It was hard to imagine anyone exceeding the record-breaking impact made in 2011 by Carolina Panthers rookie quarterback Cam Newton but it did not take long for the top two picks in this year's NFL Draft, Indianapolis's Andrew Luck and Washington's Robert Griffin III respectively, to make an impact.
Luck ushered in the post-Manning era faster than anyone had imagined, with his outstanding passing and classy composure indicating he is a player who could enjoy similar dominance to his predecessor.
Griffin, or RG3 as he is widely known, is a different quarterback altogether - his speed and courage make him a genuine double-threat, able to rush but he is also, as critics of Tebow have noted, an accomplished pocket passer too.
Seattle's Russell Wilson and Miami's Ryan Tannehill have also made good impressions in their rookie years and with Tom Brady, Drew Brees, Aaron Rodgers, Ben Roethlisberger and the Mannings still on top of their game, it has become an era of unprecedented passing yards for quarterbacks.
NASTY UNDERBELLY
Given the key role quarterbacks play, the abundance of talent at the position should mark a golden-era for America's most popular league but the game has a nasty underbelly which has been revealed on several occasions this year.
The NFL has long been plagued by off-field problems, most notably domestic violence, gun crime and drunk driving, and there have been tragic examples of all three this year.
Kansas City Chiefs linebacker Jovan Belcher fatally shot his girlfriend at their home moments before killing himself in front of his coach and general manager at the team's training facility in December.
A week later, Dallas Cowboys defensive tackle Josh Brent was charged with intoxication manslaughter after the car he was driving flipped over and caught fire, killing team mate Jerry Brown, a passenger in the car.
In May, former San Diego Chargers linebacker Junior Seau, a 12-time Pro Bowl selection, was found dead at his home in May, with a self-inflicted gunshot wound to the chest.
The manner of Seau's death and his families willingness to let his brain be examined for evidence of the impact of repeated injuries from his playing days, brought the issue of concussions back into focus.
Over 1,500 former football players have sued the NFL over head injuries and there have been accusations that the league concealed links between the game and brain injuries.
The NFL has disputed those allegations and points to its intensive education work on the issue and also the stricter new regulations covering treatment of players who are concussed.
BOUNTY PROGRAM
Concern over the potential impact of excessive violence on players was also behind NFL Commissioner Roger Goodell's strong sanctions against the New Orleans Saints, a story that hung over the league for much of the year.
The Saints were accused of running a bounty program from 2009-2011 that gave players cash rewards for knocking opponents out of games.
While Saints head coach Sean Payton was suspended for the entire season and other members of the coaching staff received shorter bans, much of the attention was on the sanctions given to four players, all of whom had their punishments overturned.
The decision by former NFL Commissioner Paul Tagliabue, with little compelling reasoning behind it, was a strange end to an affair which did little good for the league's image.
That image also took a hit from the contract dispute with referees which led to an early season lockout and resulted in some farcical decisions By the replacement referees.
The dispute culminated in botched call in a nationally televised game that handed Seattle victory over Green Bay and caused so much outrage that a deal was swiftly reached for the regular refs to return in early in the season.
But while referee dispute, off-field troubles, bounty schemes and concussion fears generated plenty of negative attention for the league they did nothing to weaken the NFL's position as the dominant sport in North America and the top draw on U.S. television.

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BYU LB Van Noy scores 2 TDs in Poinsettia Bowl win

SAN DIEGO (AP) — Linebacker Kyle Van Noy forced a fumble in the end zone and recovered it for a touchdown, and scored on a 17-yard interception return, both in the fourth quarter, to lead BYU to a 23-6 victory over San Diego State in the Poinsettia Bowl on Thursday night.
The big plays swung the momentum for the Cougars (8-5) in what had been a tedious defensive struggle. San Diego State (9-4), playing in the hometown bowl for the second time in three years, missed the chance for its first 10-win season since 1977 and had its seven-game winning streak snapped.
Van Noy scored the game's first TD when he came free and hit Adam Dingwell in the end zone, forcing and recovering a fumble for a 10-6 lead.
Dingwell fumbled the snap on SDSU's next play from scrimmage and it was recovered by Jordan Johnson at the 14. Jamaal Williams scored on a run up the middle on the next play, BYU's second TD in 17 seconds.

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Fiscal cliff efforts ongoing, Boehner offers plan

WASHINGTON (AP) — President Barack Obama and House Speaker John Boehner pushed ahead on negotiating a broad deal to avert the "fiscal cliff," even as the GOP leader readied a backup plan Tuesday to pressure the White House with little time left to avoid a double hit on the economy.

With exactly two weeks to automatic tax hikes and spending cuts, Boehner offered a measure, dubbed "plan B," that would cancel tax increases due to take effect Jan. 1 on everyone earning $1 million or less, while allowing tax increases on those earning more than that amount.

Boehner insisted that his plan would address the burgeoning deficits and that the president has failed to produce a balance plan in weeks of post-election negotiations.

But the speaker's alternative was a non-starter with the White House and Democrats, and perhaps more damaging to its prospects, got a frosty reception from rank-and-file House Republicans in a morning closed-door meeting.

"The president is willing to continue to work with Republicans to reach a bipartisan solution that averts the fiscal cliff, protects the middle class, helps the economy, and puts our nation on a fiscally sustainable path," White House spokesman Jay Carney said. "But he is not willing to accept a deal that doesn't ask enough of the very wealthiest in taxes and instead shifts the burden to the middle class and seniors."

GOP aides said the leadership strategy is to pass the alternative plan in the House and send it to the Senate. There, Republicans would use their clout to block Democratic alternatives.

Even as he offered his alternative plan, Boehner indicated that negotiations with Obama continue on avoiding the fiscal cliff. Economists inside and outside the government have warned that the combination of spending cuts and tax hikes could stall a weak recovery and threaten a new recession.

"I continue to have hope that we can reach a broader agreement with the White House" that would cancel the tax increases and spending cuts now poised to begin in early January, Boehner, R-Ohio, told reporters.

But he said when it comes to offering a package that balances tax increases with spending cuts, "The president is not there yet."

Boehner presented his alternative to his GOP caucus, which reacted coolly to any plan that includes an increase in the tax rate. Conservatives and tea partyers signaled that Boehner faces a tough time rounding up the votes.

"I think it's a terrible idea," said Rep. Raul Labrador, R-Idaho. "For a lot of reasons."

When asked whether there was enough support among fellow Republicans to pass it, Labrador said, "I do not."

Rep. Jason Chaffetz, R-Utah, said he is in favor of preventing tax hikes for as many taxpayers as possible, but he's not ready to support Boehner's plan.

"I didn't see enough specificity to support it," Chaffetz said.

Rep. Jim Jordan of Ohio, the outgoing chairman of the conservative Republican Study Committee, said, "I'm not doing cartwheels over it, that's for sure."

Jordan said Boehner's plan crosses a dangerous line by enacting higher tax rates for anyone.

"I think it's a mistake for the Republican Party, so that's what I think a lot of members are struggling with," said the Ohio Republican.

In the Senate, Democratic Leader Harry Reid said the Boehner plan could not pass and urged the speaker to work out an agreement with the president.

"Now is the time to show leadership, not kick the can down the road," Reid said. "Speaker Boehner should focus his energy on forging a large-scale deficit reduction agreement. It would be a shame if Republicans abandoned productive negotiations due to pressure from the tea party, as they have time and again."

In addition to allowing a tax increase for million-dollar earners, the Boehner plan would prevent an expansion of the alternative minimum tax that would otherwise hit 28 million middle- and upper-class Americans with an average $3,700 increase on their 2012 tax returns.

The plan also would extend the current maximum 35 percent tax rate on inheritance, exempting the first $5 million. That tax rate is slated to rise to 55 percent on Jan. 1, with only a $1 million exemption.

Under the plan, the automatic, across-the-board spending cuts of $1.09 trillion to domestic and defense programs would go into effect.

Boehner said GOP efforts to cull savings from Medicare by increasing the eligibility age from 65 to 67 could wait until next year. That source of savings had been an important demand from Republicans earlier in Boehner's negotiations with the White House.

Boehner aides said the call for a separate tax bill does not mean the Republican is cutting off negotiations with Obama on averting the full slate of tax hikes and spending cuts due to take effect next year. Obama and Boehner have each made significant concessions in recent days, signaling a new stage in the negotiations.

Boehner's latest move is an attempt to give Republicans political cover if Washington fails to reach a deal before the end of the year and taxes increase on all income earners.

In the negotiations, the president has dropped his long-held insistence that taxes rise on individuals earning more than $200,000 and families making more than $250,000. He is now offering a new threshold of $400,000 and lowering his 10-year tax revenue goals from the $1.6 trillion he had argued for a few weeks ago.

Obama and Boehner met privately at the White House on Monday, and then spoke again on the phone later that night. Boehner huddled with House GOP members on Capitol Hill Tuesday morning to discuss the status of the talks and review Obama's latest offer.

"We have to stop whatever tax rate increases we can," Boehner said in the meeting, according to prepared remarks released by an aide. "In the absence of an alternative, as of this morning, a "modified Plan B" is the plan."

Unless Congress acts, tax rates will increase on all income earners on Jan. 1. Boehner first opposed raising rates on any income earners, including the wealthiest Americans, but agreed on Friday to accept an increase in tax rates for taxpayers who earn more than $1 million. Boehner's plan would raise about $1 trillion in taxes over 10 years.

In return, Obama also abandoned his demand for permanent borrowing authority. Instead, he is now asking for a new debt limit that would last two years, putting its renewal beyond the politics of a 2014 midterm election.

And in a move sure to create heartburn among some congressional Democrats, Obama is proposing lower cost-of-living increases for Social Security beneficiaries, employing an inflation index that would have far-reaching consequences, including pushing more people into higher income tax brackets.

Those changes, as well as Obama's decision not to seek an extension of a temporary payroll tax cut, would force higher tax payments on the middle class, a wide swath of the population that Obama has repeatedly said he wanted to protect from tax increases.

As public posturing has given way to pragmatism, both sides still seem willing to lock in on a substantial agreement rather than just putting off a fiscal day of reckoning. To that end, Obama has conceded that a big bargain would require giving up some of his proposals.

"I understand that I don't expect the Republicans simply to adopt my budget," he said during his post-election news conference last month. "That's not realistic. So, I recognize we're going to have to compromise."

Despite signs of progress, there are still plenty of disputes to iron out. And people familiar with Obama's proposal were careful not to describe it as his final offer.

The Obama plan seeks $1.2 trillion in revenue over 10 years and $1.2 trillion in 10-year spending reductions. Boehner aides say the revenue is closer to $1.3 trillion if revenue triggered by the new inflation index is counted, and they say the spending reductions are closer to $930 billion if one discounts about $290 billion in lower estimated debt interest.

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ECB'S Praet says France must cut spending and reform

PARIS (Reuters) - France must cut spending to meet its budget deficit target and undertake structural reforms to boost competitiveness, European Central Bank Executive Board Member Peter Praet said on Tuesday.

President Francois Hollande has pledged to slash the public deficit to 3 percent of economic output next year from an estimated 4.5 percent this year, but has so far shied away from deep-reaching spending cuts many economists say are necessary.

In an interview with French daily Le Figaro, Praet said the government's deficit-cutting plans relied too much on tax rises, and that over the long term it was vital to implement reform.

"France has too often resisted change," Praet said.

"There is a consensus now in France on the need to improve public finances and competitiveness. To do that, structural reform is needed."

France's Socialist government launched a public spending review on Tuesday, but stopped short of outlining budget cuts, focusing instead on streamlining administrative procedures in order to find savings.

At 57 percent of GDP, France's public spending is among the highest in the developed world, and Praet said deeper measures were needed to change the structure of outlays to keep finances on track.

Last month's decision to cut labour costs by introducing tax rebates for companies was a step in the right direction, he said, but the move was financed by tax rises such as a hike in VAT which would ultimately limit its impact.

Moody's rating agency last month stripped France of its triple-A credit rank, warning it would downgrade the country's debt further if the government failed to implement reforms such as a labour market overhaul.

The agency said the growth forecasts built into the government's medium-term budget plan were overly optimistic, and changes need to be made to rigid labour laws and to goods and services markets to make the country more competitive.

France's growth forecast of 0.8 percent for next year has been questioned by economists, given that the broader euro zone economy has slipped into recession.

Praet said that despite the economic downturn, France and other countries in the bloc should not back away from meeting a 3 percent deficit target.

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Wall Street climbs on economy bets as it looks past "cliff"

NEW YORK (Reuters) - U.S.  stocks rallied on strong volume on Tuesday, capping off the S&P 500's best two-day run in a month, on confidence that a deal would be struck in Washington to avoid painful spending cuts and tax hikes that could hurt the economy.

Banks, energy and technology - sectors that would benefit during economic expansion - led gains as investors remain confident that lawmakers will come to an agreement to avoid the so-called "fiscal cliff" deadline at the end of the year.

The PHLX oil services sector index <.osx> jumped 3.1 percent, with eight of its 15 components up 3 percent or more.

"The view is that the economy is getting better, and that is always good for energy demand," said Shawn Hackett, president at Hackett Financial Advisors in Boynton Beach, Florida.

Hackett said the United States would avoid "whatever the cliff means" for the economy, allowing investors to focus on growth.

President Barack Obama's most recent offer to Republicans in the ongoing budget talks makes concessions on taxes and social programs spending. House Speaker John Boehner said the offer is "not there yet," though he remains hopeful about an agreement. Senate Democrats, however, have expressed concern about cuts to Social Security.

Financial stocks shot higher, as traders bet on a greater demand for loans and a steepening of the yield curve. U.S. government debt sold off Tuesday, with the benchmark 10-year U.S. Treasury note's yield briefly hitting its highest since late October.

The S&P financial sector <.gspf> added 1.5 percent.

The Dow Jones industrial average <.dji> rose 115.57 points, or 0.87 percent, to 13,350.96 at the close. The S&P 500 <.spx> gained 16.43 points, or 1.15 percent, to 1,446.79. The Nasdaq Composite <.ixic> added 43.93 points, or 1.46 percent, to 3,054.53.

It was the S&P 500's first back-to-back gain of more than 1 percent since late July.

Stocks of smaller companies outperformed the broader market, with the Russell 2000 <.rut> up 1.5 percent.

Shares of firearm makers sank in the aftermath of a school shooting in Newtown, Connecticut, on Friday that killed 20 young children and six adults.

Smith and Wesson fell 10 percent to $7.79 on its largest-ever daily volume, though it was still up about 77 percent so far this year. Sturm Ruger and Co slid 7.7 percent Tuesday to $40.60.

Private equity firm Cerberus Capital Management said it would sell gunmaker Freedom Group, whose Bushmaster AR-15 rifle was used in the Connecticut massacre. Dick's Sporting Goods suspended the sale of certain semi-automatic rifles in its stores nationwide.

Technology shares rose, led by Apple , up 2.9 percent at $533.90 after losing nearly 13 percent in the last two weeks. The S&P Information Technology Index <.gspt> rose 1.7 percent.

Arbitron Inc surged 23.6 percent to $47.03 after Nielsen Holdings NV agreed to buy the media and marketing research firm in a deal worth $1.26 billion. Nielsen rose 4.4 percent to $30.92.

About 7.4 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, more than the daily average so far this year of about 6.5 billion shares.

On the NYSE, roughly 14 issues rose for every five that fell, while on the Nasdaq, advancers outnumbered decliners by a ratio of about 5 to 2.

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Analysis: U.S. policy gridlock holding back economy? Maybe not

(Reuters) - Washington thinks a resolution of the tense debate over the national debt will unlock a burst of economic growth by lifting uncertainty that has stymied investment.

It is a widely held view on Wall Street as well, derived from the glaring signs of weak business confidence over the last year as America struggles to get its fiscal house in order.

However, evidence for this belief is far from clear and is an issue of considerable debate, and even some businesses wonder how big a factor uncertainty is.

In Lexington, Kentucky, new sales are slipping at Gray Construction, a family-owned builder of factories and distribution centers. Clients say they are holding back because America could fall into recession if Congress and the White House don't strike a deal soon to avoid a "fiscal cliff" of some $600 billion in tax increases and government spending cuts due to begin in January.

"They're saying: 'Let's wait. Let's see what happens,'" Chief Executive Stephen Gray said.

And yet, the company, which also does design and engineering work, still has a record backlog of work and has hired about 30 people in the last six months.

The company's CEO has seen little dips in the sales pipeline before and said it's hard to know how different business would be if Washington's politicians inspired more confidence. As it is, Gray sees no reason to stop hiring: "I'm not super-worried."

Like Gray, economists are also unsure how much they can attribute business decisions to something so indeterminate as uncertainty, and they are divided over the degree to which erratic policymaking has dragged on the economy in recent years, if it has at all.

Answering this question could give important clues on how the economy will perform next year, whether or not Congress strikes a deal to avoid the fiscal cliff.

HOLDING BACK

Toward that end, researchers at Stanford University and the University of Chicago have created an index to gauge just how murky the future looks.

They count soon-to-expire tax provisions and mentions of uncertainty in major newspapers, as well as how much economic forecasters disagree on things like future government spending.

In a sample period between 1985 and 2011, they found heightened uncertainty went hand in hand with weak economic growth and hiring. Their index hit an all-time high last year when congressional gridlock nearly led the United States to default on its debt. It remains high, with a host of temporary tax cuts due to expire at year's end and the debate over the fiscal cliff regularly splashed across front pages.

Nicholas Bloom, a Stanford economist who helped make the uncertainty index, says weak levels of investment, along with surveys in which businesses say they are holding back because of concerns over the direction of policy, suggest uncertainty has weighed on growth since late 2011.

This year, business investment on capital goods - things like equipment and machinery - has fallen short of what economists would expect considering the $1.7 trillion in cash that companies were holding in the third quarter.

New orders for non-defense capital goods other than aircraft fell 7 percent in the year through October, while total business investment in the third quarter dropped the most since 2009.

Bloom says businesses would spend their cash more readily if politicians united around a grand bargain to put U.S. fiscal policy on a stable path. Using past correlations between uncertainty and economic growth as a guide, he estimates that lifting uncertainty could add about 3 percent to gross domestic product over the next 18 months - enough growth to create roughly 2 million jobs.

"There should be a surge of investment and hiring," he said.

That would be a big boost to the lackluster 1.9 percent growth rate many economists expect next year.

A deal in Congress that avoids the fiscal cliff while taming the nation's $16 trillion debt over the long term may come by year-end or in early 2013. It is also plausible Washington will avoid the fiscal cliff but kick the can into 2013 when it comes to the details of longer-term deficit planning.

Republican House Speaker John Boehner, who has looked exasperated in public over the fiscal debate, has edged closer to President Barack Obama's key demands in the last few days, and the president made a counteroffer on Monday that could put a deal within reach. The two sides still differ on where to set tax rates and how to overhaul social spending programs.

The tense negotiations have corporate America on edge.

So far this month, companies have submitted 148 statements to the Securities and Exchange Commission expressing concern about the fiscal cliff. In November, there were 215 such warnings, up from 80 in October and none prior to May. About half of 200 big companies surveyed by American Express last month said Congress won't resolve the fiscal cliff this year.

Chemical maker DuPont is trimming its capital investment plans due to uncertainty. "We're not going to spend as much as we thought next year," DuPont CEO Ellen Kullman said last week in an interview.

Treasury Secretary Timothy Geithner told CNBC earlier this month that reaching a sensible fiscal deal would get rid of the biggest roadblock to stronger growth. Many business leaders and lawmakers agree.

NO SURE THING

However, some economists doubt uncertainty has played such a central role holding back the U.S. economy. If they are right, growth next year could disappoint even if politicians wow investors with a grand bargain.

Researchers at Goldman Sachs say the weak economy might be boosting measures of uncertainty as much as the other way around.

The bank doesn't rule out an "uncertainty shock" over the next few months - most economists think uncertainty must matter for something - but its researchers crunched numbers and found there might be a simpler explanation for the disappointing levels of business spending.

The bank's economists calculated how much the business sector would normally be investing given its assets and the stage of the business cycle, and found the recent shortfall could be mostly explained by a lack of available credit.

Rather than being too scared to invest, companies might simply be having trouble getting loans. That makes sense considering many banks are still licking their wounds from the recent financial crisis.

"The evidence that a policy uncertainty shock is already depressing activity is far from unequivocal," Goldman Sachs economists Jan Hatzius and Sven Jari Stehn wrote in a recent note.

Their research suggests some of the hype over uncertainty is overblown. Indeed, much of the country is not paying attention to the fiscal cliff debate.

A poll by Gallup conducted December 1-2 showed only 60 percent of Americans were following the talks at least somewhat closely. In the history of national events tracked by Gallup, that ranks somewhere between the Iraqi election of 2005 and the confirmation hearings for Supreme Court Justice Samuel Alito in 2006.

Households, whose spending drives more than two-thirds of the economy, are not as worried as the country's CEOs, although a recent consumer sentiment survey showed concerns appeared to grow in early December.

Some economists say the most important issue for Congress is not to resolve policy uncertainty but rather to strike a fiscal deal that doesn't hurt the economy by ushering in harsh budget austerity measures.

Surveys of small businesses show companies are worried about higher taxes, but over the last few months and years they have worried even more about poor sales. Adjusting for inflation, household incomes are still lower than they were before the recession. This has depressed spending, a situation that could be exacerbated by tighter fiscal policy.

"The biggest uncertainty is whether the U.S. consumer is really back," said Stephanie Kelton, an economist at the University of Missouri-Kansas City.

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South Africa's Zuma boosted by Ramaphosa return in ANC win

BLOEMFONTEIN, South Africa (Reuters) - South Africa's ruling African National Congress (ANC) re-elected President Jacob Zuma as its leader on Tuesday, setting him up for seven more years as head of state of Africa's biggest economy.

Nelson Mandela's 100-year-old liberation movement also chose respected businessman Cyril Ramaphosa as his deputy, seeking to repair the image of a Zuma administration battered by corruption scandals and strikes and facing growing discontent among the poor black majority.

More than 4,000 ANC delegates crammed into a marquee in the central city of Bloemfontein erupted into wild cheers when Zuma was confirmed in the top party post after comfortably seeing off a challenge by Deputy President Kgalema Motlanthe.

Given the ANC's dominance at the ballot-box less than two decades after the end of apartheid, 70-year-old Zuma is virtually assured a second, five-year term as President of South Africa in 2014 elections.

The rand briefly edged higher against the dollar, reflecting relief among investors at the prospect of policies remaining largely unchanged.

After the vote, the beaming president, who secured 2,995 votes out of 3,977 cast, walked on stage to shake hands with his fellow 'comrades' - a label reflecting the ANC's roots in the communist-backed struggle against decades of white-minority rule.

Zuma, a polygamous Zulu traditionalist, came to power in 2009 amid the first recession in 18 years and has had a chequered economic record, culminating in violent labor unrest in the mines this year that triggered two downgrades in South Africa's credit ratings.

He has also been dogged by personal scandals, including fathering a child by the daughter of a close friend. Despite this, his popularity within the party is overwhelming.

"I don't care what people say about Jacob Zuma," said Sinovuyo Kley, a delegate from the impoverished Eastern Cape. "When you hear him sing, you know he is one with the people. He speaks our language and knows our struggles."

RAMAPHOSA RETURNS

Zuma's re-election had looked likely for much of the year, making the main talking point of the five-day Bloemfontein conference the political renaissance of Ramaphosa after a decade-long absence to focus on his business interests.

Attention was also diverted by the arrest of four whites on suspicion of a plot to bomb the meeting and execute Zuma and top ministers as part of a plan to carve an independent Afrikaner state out of Mandela's "Rainbow Nation".

Having risen to prominence as a charismatic union leader in the 1980s, Ramaphosa became the ANC's main negotiator in the talks that led to historic all-race elections in 1994 and Mandela's appointment as South Africa's first black president.

He was also tipped as a successor to the revered Mandela - now 94 and recovering in hospital from a lung infection - but gradually removed himself from politics when the job went to party stalwart Thabo Mbeki in 1999.

It was unclear just how much impact Ramaphosa's inclusion in Zuma's inner circle could have on the ANC government.

Some analysts say he should help push through plans to lift long-term economic growth and stop South Africa's competitive slide against fast-growing economies in Asia and South America.

However, others who know his business style told Reuters he tended not to throw his weight around in company board-rooms, suggesting he might avoid challenging South Africa's politically powerful unions.

"He is surprisingly quiet and non-confrontational on boards," one person who knows Ramaphosa said.

Others suggest that his ranking as South Africa's second richest black businessman could limit his appeal to the legions of poor and jobless who are increasingly doubting the ANC's post-apartheid promise to deliver "a better life for all".

LOOMING DOWNGRADE

"Looking further ahead, we remain doubtful that Zuma can oversee the reforms needed to pull the South African economy out of its current rut," said Shilan Shah, Africa economist at UK-based Capital Economics.

There is precious little time to make an impact, with Fitch expected in January to follow Moodys and Standard & Poor's in cutting South Africa's credit rating because of concerns about sluggish growth, forecast at 2.5 percent this year.

"The leadership issue is never really decisive for the market," said Nomura emerging markets analyst Peter Attard-Montalto. "It's always interested in policy and that's far more what the ratings agencies are looking at."

Zuma may also find his Bloemfontein victory dance cut short, with a poll published this week putting his nationwide approval rating at 52 percent, in contrast to 70 percent for the outgoing Motlanthe. This reflects just how much the internal politics of the ruling ANC is insulated from daily realities.

The opposition Democratic Alliance (DA) is starting to make in-roads into ANC support at local and regional level despite its reputation among many black South Africans as the party of white privilege. The DA said it had been inundated with membership inquiries within an hour of Zuma being re-elected.

Even within his own party, young South Africans are snapping at Zuma's heels, demanding political and economic change for a generation that has little memory of apartheid but which remains at the sharp end of 25 percent unemployment.

"The young people of South Africa are tired of promises and need action for economic freedom in our lifetime," the ANC Youth League, which had backed Motlanthe, said in a statement.

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